Bitcoin Price Rebounds From $5,500 to $6,200, Ready For a New Rally?
Over the past 24 hours, the bitcoin price has demonstrated extreme volatility, declining to $5,500 at one point. Since hitting a new weekly low, it has recovered to $6,200.
The recent decline in the price of bitcoin can be wholly attributed to the surge in the value of Bitcoin Cash, and the movement of SegWit2x supporting investors, users, and businesses shifting toward Bitcoin Cash with one unified vision.
Consequently, the price of Bitcoin Cash has increased from $600 to $1,500 in the past week, reaching $2,800 earlier today. As the Bitcoin Cash price plunged from $2,800 to $1,500, the price of bitcoin recovered, from $5,700 to $6,200.
Can Bitcoin Initiate a New Rally?
As Xapo President Ted Rogers stated earlier today, on November 12, the surge in the price of Bitcoin Cash was not sustainable, given that there was no infrastructure, community and active user base to back such trend, even if the SegWit2x supporters have migrated to Bitcoin Cash.
While Bitcoin Cash has become too expensive at this point to obtain for investors, Rogers emphasized that bitcoin has become irresistibly cheap, given that the price of bitcoin peaked at $7,900 last week and it remains just below $6,300.
Like Rogers expected, traders have started to buy the dip, as the bitcoin price rebounded in a relatively short period. But, the question remains, can bitcoin initiate a new rally to recover to its all-time high of $7,900?
There exists several major events to acknowledge in evaluating the mid-term performance of bitcoin. Earlier today, Simon Dixon, the co-founder and CEO of BnkToTheFuture, stated that the bitcoin price will likely increase in the upcoming weeks due to the entrance of large-scale institutional and retail investors through strictly regulated bitcoin futures and derivatives exchanges.
CME Group and CBOE, two of the largest options exchange in the world, alongside LedgerX, will launch bitcoin options, futures, and derivatives targeting institutional investors by the end of 2017. CME Chairman Leo Melamed noted earlier this month that a growing number of hedge funds, investors, and investment firms have begun to consider bitcoin as a new asset class, not merely a digital currency.
Impact of Bitcoin Cash and Price Target by the End of 2017
If SegWit2x supporting businesses and miners from the original NYA / SegWit2x agreement continue to support Bitcoin Cash and build infrastructure around it, it is likely that Bitcoin Cash will co-exist with bitcoin as leaders of the cryptocurrency market.
As bitcoin and security expert Andreas Antonopoulos stated, the two cryptocurrencies can co-exist, as bitcoin and Ethereum have done for the past two years, as they operate with contrasting philosophies, visions, and strategies.
Even with Bitcoin Cash, the entrance of retail investors into the bitcoin sector will likely trigger a rapid increase in the demand for bitcoin as a store of value and safe haven asset, allowing it to achieve new highs in the mid-term.